If you are considering an estate plan, you need to take a close look at a trust.
Trusts are not always better than wills. However, there are at least five scenarios that put trusts out front, according to Wicked Local Norwood in "Five Ways in which a trust is better than a will."
Those reasons include:
- With a trust you can avoid probate, which can be expensive and time-consuming. Most wills have to go through probate court.
- A trust can be drafted that protects your beneficiaries from creditors. If you give heirs money outright in a will, then any creditors they have can go after that money. Trusts avoid this problem.
- Special needs trusts can be used to give assets to people with disabilities, without making them ineligible for government benefits.
- Trusts can be used to reduce estate taxes in ways that are impossible to do with wills.
- With a trust, you can leave assets for minor children that are managed by a third-party without the unnecessary intervention of probate courts.
All that noted, wills have the benefit of a neutral judge overseeing the process and “testamentary trusts” can be created under wills that accomplish the same ends as those available through a revocable living trust that avoids probate.
An estate planning attorney can guide you on creating an estate plan that fits your unique circumstances and may well include a trust.
Reference: Wicked Local Norwood (May 14, 2017) "Five Ways in which a trust is better than a will."